CONSUMER MATTERS: CONSUMER PROTECTION IN THE GLOBAL MARKET

At its meeting in Tunis in May 1998, COPOLCO adopted a resolution
establishing a working group on consumer protection in the global
marketplace. The impetus for its establishment came largely from two
sources. First, there was an emerging market whereby consumers were
buying goods via the Internet and secondly, due to the increased
globalisation affecting consumer markets for goods and services in both
the on-line and off-line contexts.

As a result and
taking into account the complexity and costs of taking action in a
foreign jurisdiction, traditional forms of consumer protection
established by national and provincial governments were felt to be
largely impractical for global purchasers. The role of the working
group, therefore, was to develop policy proposals for consideration by
COPOLCO and ultimately for ISO.

Briefly discussed here are three areas that have received significant attention from the working group:

- Corporate social responsibility;

- Codes of conduct and

- Complaints handling.

One
of the important outcomes from the working group s deliberations has
been the development of an International Standard on Complaints handled
(future ISO 10018) within ISO/TC 176/SC 3/WG 10. The draft document has
been approved to go out as an International Standards (DIS) draft from
February 2003 for a five month commentary period. It is anticipated
that the standard will be published in mid-2004. As the draft standard
states, implementation of the processes contained within it can:

- Provide a complainant with access to an open and responsive complaint-handling system;

-
Enhance the ability of an organisation to resolve complaints in a
consistent and systematic manner, to the mutual satisfaction of both
complainant and organisation;

- Enhance the ability
of an organisation to develop and to identify trends and eliminate root
causes of complaints. By these means, it would improve organisational
operational functioning;

- Help create a
customer-focused approach to resolving complaints, thereby encouraging
personnel to improve their customer service; and

- Provide a basis for continual review, analysis and improvement of the complaint handling process.

As
a result of the working group's activities, several new work items have
been approved by the ISO. These initiatives are a logical continuation
of the draft standard on complaints handling and specifically consider:

- External customer resolution systems and

- Dispute/complaints prevention by means of codes of conduct.

Both
of these proposals are important in terms of redress mechanisms for
consumer transactions carried out over the internet. However, with
regard to the latter, codes of conduct are seen as a means of
complaints/dispute prevention in that they can contain rules that, if
followed, provide a minimum level of product and service quality.

Internationally recognised minimum criteria for codes of conductThe
primary rationale for proposing some internationally recognised minimum
criteria for codes is linked to the global need for affordable and
accessible redress mechanisms for consumers. That said, however, ISO
standards in this area could also provide some benchmarks for locally
based systems.

Increasingly, merchants (and others)
are developing codes of conduct and making claims about those codes of
conduct to consumers. To date, however, there has been no
internationally agreed upon set of criteria for the development,
content and use of codes. The result has been that both merchants and
consumers alike have difficulty knowing which code claims are credible
and verifiable, and which are not.

The working
group considered it important to develop a set of essential criteria
for effective codes, based on criteria established by a reputable and
well recognised international body such as the ISO, in order to give
consumers the confidence to deal with traders who comply with a code.
At the same time, it has also sought to offer guidance to merchants
about how to develop effective and credible codes of conduct.

Such
a standard and when developed, would set criteria for codes of
individual firms, as well as those at the sectoral level. In other
words, codes of conduct would pertain to single activities or to a wide
range of activities. In both cases the aim would be the creation of
internationally recognised objective criteria, not only to ensure the
credibility of codes, but also to ensure their delivery of real
outcomes in the marketplace.

The working group has
been supported in their activities in this regard by recent
dissatisfaction expressed by both domestic and regional governments.
Dissatisfaction with the current situation and a desire for a
corrective solution to the problem has also been articulated by
organizations that operate codes and specifically with regard to
international deficiencies in the processes of code development and
implementation.

Enhancing fair trading in the marketplaceThe
working group's objective of proposing an International Standard on
codes of conduct would, therefore, aim to enhance fair trading in the
marketplace. At the same time, it would also seek to establish
procedures for code development and implementation to ensure that
claims about codes could be both verified and substantiated. It should
be emphasized at this point, however, that any proposed standard would
not in any way prescribe what should be the content of codes. This is
for individual organisations to decide.

The
proposal for external customer dispute resolution systems is important
because it will set some internationally recognised minimum criteria
for industry-based dispute resolution schemes which are becoming
popular in a number of countries, offering affordable and accessible
redress schemes for consumers. These criteria, if applied, should lead
to an effective form of dispute resolution.

The
final issue of central activity to the working group has been in the
area of corporate social responsibility. This has resulted in the
proposal for a high-level advisory group to examine the feasibility of
a standard on the issue. This has occurred against a backdrop of not
only a great deal of consumer and business interest in the topic, but
also with national standards on the topic.

These
were already developed by Israel, Spain and current development in
Australia. The working group prepared a draft report on the
desirability and feasibility of ISO Corporate Responsibility standards
for consideration by COPOLCO at its June 2002 annual meeting in
Trinidad. In Trinidad, COPOLCO agreed to recommend to ISO that an
Advisory Group be established and made up of relevant interested
parties.

[continued in next Feature]

About the authorBill Dee, Chair of the COPOLCO working group on consumer protection in
the global marketplace and Chair of the ISO/TC 176/SC 3/WG 10.